1 CRYPTO

U.S. crypto investors have been waiting for what seems like forever for a Bitcoin ETF, but the Securities and Exchange Commission keeps scowling at their proposals.

However, there’s another innovative exchange-traded fund (ETF) proposal sitting on the SEC’s desk, and while it engages solely with traditional markets, it’s nevertheless based on a scheme that observers must admit is a naked marketing ploy.

In the works is what’s supposed to be a low-cost ETF that not only slashes fees to the bone but actually pays investors to purchase shares.

If the SEC green lights this fund, Bitcoin proponents would rightfully be ticked off at the dinosaurs at the regulatory agency.

Salt ETF Pays You to Invest

The fund is trying to initially raise $100 million. To reach that goal, it is offering to pay investors to put money in it, so for the first $100 million brought into the fund, Salt won’t charge anything and will instead add 0.05% to initial investments.

For every $10,000 a person invests, they get about $5 back, which amounts to five basis points.

The fund filed its application last week and is pending SEC approval.

Negative-Fee ETF Uses One Heck of a Marketing Ploy

The unconventional setup is getting plenty of attention. For example, Tom Lydon, editor, and proprietor of ETFTrends.com, told CNBC that it was “brilliant.”

“Is it a marketing ploy? Maybe, but it’s probably a great one because all the money is going into low-cost ETFs. Getting through the gatekeeper is key. When you look under the hood, it’s actually a great strategy. When you look at other low-volatility smart beta strategies, it really is good, and that will help get it attention.”

While it may seem like a money loser, in the end, it could be a hit. Lydon noted that the idea of paying investors could do the trick in attracting people who may not be interested at first.

“I think you’re going to see more people try this, because if you can finance a launch that’s going to get you to $100 million, you’ve got a better chance of getting to $1 billion. The biggest challenge is getting to that first $100 million.”

The reason meeting that $100 million goal is important is because it will allow the ETF to be available on more platforms, including those operated by Morgan Stanley and Merrill Lynch.

Would the SEC Really Approve Salt’s Application While Shunning Bitcoin?